Correlation Between Eiffage SA and Bowman Consulting
Can any of the company-specific risk be diversified away by investing in both Eiffage SA and Bowman Consulting at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Eiffage SA and Bowman Consulting into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eiffage SA ADR and Bowman Consulting Group, you can compare the effects of market volatilities on Eiffage SA and Bowman Consulting and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Eiffage SA with a short position of Bowman Consulting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eiffage SA and Bowman Consulting.
Diversification Opportunities for Eiffage SA and Bowman Consulting
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eiffage and Bowman is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Eiffage SA ADR and Bowman Consulting Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowman Consulting and Eiffage SA is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Eiffage SA ADR are associated (or correlated) with Bowman Consulting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowman Consulting has no effect on the direction of Eiffage SA i.e., Eiffage SA and Bowman Consulting go up and down completely randomly.
Pair Corralation between Eiffage SA and Bowman Consulting
Assuming the 90 days horizon Eiffage SA ADR is expected to under-perform the Bowman Consulting. In addition to that, Eiffage SA is 1.12 times more volatile than Bowman Consulting Group. It trades about -0.12 of its total potential returns per unit of risk. Bowman Consulting Group is currently generating about 0.43 per unit of volatility. If you would invest 2,167 in Bowman Consulting Group on September 4, 2024 and sell it today you would earn a total of 498.00 from holding Bowman Consulting Group or generate 22.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eiffage SA ADR vs. Bowman Consulting Group
Performance |
| Timeline |
| Eiffage SA ADR |
| Bowman Consulting |
Eiffage SA and Bowman Consulting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eiffage SA and Bowman Consulting
The main advantage of trading using opposite Eiffage SA and Bowman Consulting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eiffage SA position performs unexpectedly, Bowman Consulting can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Bowman Consulting will offset losses from the drop in Bowman Consulting's long position.| Eiffage SA vs. Concrete Pumping Holdings | Eiffage SA vs. ACS Actividades de | Eiffage SA vs. ACS Actividades De | Eiffage SA vs. Badger Infrastructure Solutions |
| Bowman Consulting vs. EMCOR Group | Bowman Consulting vs. Comfort Systems USA | Bowman Consulting vs. Primoris Services | Bowman Consulting vs. Granite Construction Incorporated |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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